Spring might be the season for cleaning up your finances, but summer is a great time to stop bad money habits in their tracks.
Whether you’re taking a vacation or dining at restaurants, it’s easy to blow past your budget in pursuit of summer fun.
If any of these five bad habits sound familiar, try these expert tips for taking back control of your personal finances this summer.
1. Throwing your budget out the window
Winter is finally in the rearview mirror, and you’re excited to make the most of the warm weather. But the costs of going out can add up, so be careful not to forget about your budget this summer.
“Between eating out and drinking at bars, house parties, or the various (and numerous) summer festivals, spending money becomes second nature,” warned Ryan Boggs, a wealth adviser at FourStar Wealth Advisors.
Instead of spending all your disposable income on summer fun, Boggs recommends writing down a spending plan.
“Create a budget of what you can spend in a week or a month and stay within your budget,” he advised.
By setting limits before you go out, you can prevent yourself from overspending. And if you don’t want to track every expense, download a money management app such as Mint or YNAB to do the work for you.
2. Splurging on the regular
Another bad money habit to shed this summer is splurging on a regular basis. Treating yourself once in a while is fine, but if it becomes too frequent, it could drain your bank account.
That’s why Brad Ruttenberg, co-creator of personal finance blog The Money Twins, recommends adding a cheat day to your monthly budget, just as you would with a diet.
“If you’re on a diet, a weekly cheat meal gets it out of your system and helps you stick to it longer,” said Ruttenberg. “Same with a budget.”
So what should this cheat day look like?
“Once a month, take one day and splurge a little,” Ruttenberg said. “Go out for a big family dinner, buy a shirt you’ve wanted, or, my favorite, buy something that might represent a bigger goal, like a new piece of luggage for your big vacation you’re saving for.”
By setting aside one or two days a month for special purchases, you can avoid overspending on a regular basis.
3. Going out to eat every night
In our Student Loan Hero survey about financial regrets, 51% of respondents said they felt going out to eat was an expense they needed to cut back on.
Eating out is especially easy to do in the summer, when the weather is beautiful and you’re eager to go out on the town.
“One of the biggest bad money habits you can break over the summer is overspending on eating out,” said Deborah Sweeney, CEO of MyCorporation. “It’s easy to slip into this habit when visiting friends or family or traveling on vacation, and it adds up very quickly if you make it a daily habit.”
Instead of heading to restaurants all the time, Sweeney recommends meal-prepping as a more affordable (and healthier) alternative.
By planning out your meals for the week in advance, you’ll have a clearer sense of how much you’re spending on food, as well as a solid plan for eating that doesn’t involve pricey takeout or restaurants.
4. Carrying a revolving credit card balance
Forty-seven percent of respondents from our survey said credit card debt was the type of debt they regretted the most.
It’s especially easy to take on credit card debt if you’re traveling this summer. Although charging your travel expenses can earn you travel rewards points, it becomes a problem if you can’t pay off your balance from month to month.
Interest rates on credit cards are high — they average 16.75%, according to CreditCards.com — so carrying a balance could cost you a lot of money over time.
As your balance grows, it only gets more difficult to pay off. If you’re prone to overspending on credit cards, consider using cash to make purchases instead.
“Visit the ATM each Friday and take out your ‘allowance’ for the week,” recommended Ruttenberg. “It’s much easier to keep track of what’s left. You’ll think ahead and decide if today’s purchase is more important than something else coming later in the week.”
5. Forgetting about your savings goals
Touring summer music festivals or vacationing in Europe sounds way more fun than building an emergency fund or saving for retirement.
But if you forgo your savings goals now, you’ll risk your future financial security. Instead of ignoring your savings habits, check back in with how much you need to set aside each month to stay on track.
An easy way to make progress is to automate a certain percentage of your income into your savings accounts each month.
And if your budget is really tight, start small. Even saving $20 a week (or month) will add up over time. You might also look for ways to earn more money to kick-start your savings goals.
“Summer is a great time to shift your money mindset,” said Larry Ludwig, personal finance expert and founder of Investor Junkie. “Instead of looking for yet one more way to cut back, why not try [to] earn more? More sunlight equals longer days equals more time to make more money.”
By picking up a side hustle or part-time job, you could set up an additional income stream and meet your savings goals even faster.
Make mindful spending a priority this summer
Spending more in the summer isn’t always a bad thing, but you have to plan for it. Create a budget, and make sure you stick to your savings goals.
By being mindful with your money, you can enjoy the warm weather without breaking the bank. At the end of the summer, your tan might fade, but your new and improved financial habits won’t.
Interested in refinancing student loans?Here are the top 6 lenders of 2019!
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1 Important Disclosures for Earnest.
To qualify, you must be a U.S. citizen or possess a 10-year (non-conditional) Permanent Resident Card, reside in a state Earnest lends in, and satisfy our minimum eligibility criteria. You may find more information on loan eligibility here: https://www.earnest.com/eligibility. Not all applicants will be approved for a loan, and not all applicants will qualify for the lowest rate. Approval and interest rate depend on the review of a complete application.
Earnest fixed rate loan rates range from 3.47% APR (with Auto Pay) to 7.59% APR (with Auto Pay). Variable rate loan rates range from 2.27% APR (with Auto Pay) to 6.89% APR (with Auto Pay). For variable rate loans, although the interest rate will vary after you are approved, the interest rate will never exceed 8.95% for loan terms 10 years or less. For loan terms of 10 years to 15 years, the interest rate will never exceed 9.95%. For loan terms over 15 years, the interest rate will never exceed 11.95% (the maximum rates for these loans). Earnest variable interest rate loans are based on a publicly available index, the one month London Interbank Offered Rate (LIBOR). Your rate will be calculated each month by adding a margin between 1.82% and 5.50% to the one month LIBOR. The rate will not increase more than once per month. Earnest rate ranges are current as of August 15, 2019, and are subject to change based on market conditions and borrower eligibility.
Auto Pay discount: If you make monthly principal and interest payments by an automatic, monthly deduction from a savings or checking account, your rate will be reduced by one quarter of one percent (0.25%) for so long as you continue to make automatic, electronic monthly payments. This benefit is suspended during periods of deferment and forbearance.
The information provided on this page is updated as of 08/15/2019. Earnest reserves the right to change, pause, or terminate product offerings at any time without notice. Earnest loans are originated by Earnest Operations LLC. California Finance Lender License 6054788. NMLS # 1204917. Earnest Operations LLC is located at 302 2nd Street, Suite 401N, San Francisco, CA 94107. Terms and Conditions apply. Visit https://www.earnest.com/terms-of-service, email us at email@example.com, or call 888-601-2801 for more information on our student loan refinance product.
© 2018 Earnest LLC. All rights reserved. Earnest LLC and its subsidiaries, including Earnest Operations LLC, are not sponsored by or agencies of the United States of America.
2 Important Disclosures for SoFi.
3 Important Disclosures for Laurel Road.
Laurel Road Disclosures
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the fixed rate will decrease by 0.25%, and will increase back up to the regular fixed interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
However, if the borrower chooses to make monthly payments automatically by electronic funds transfer (EFT) from a bank account, the variable rate will decrease by 0.25%, and will increase back up to the regular variable interest rate described in the preceding paragraph if the borrower stops making (or we stop accepting) monthly payments automatically by EFT from the designated borrower’s bank account.
All credit products are subject to credit approval.
Laurel Road began originating student loans in 2013 and has since helped thousands of professionals with undergraduate and postgraduate degrees consolidate and refinance more than $4 billion in federal and private school loans. Laurel Road also offers a suite of online graduate school loan products and personal loans that help simplify lending through customized technology and personalized service. In April 2019, Laurel Road was acquired by KeyBank, one of the nation’s largest bank-based financial services companies. Laurel Road is a brand of KeyBank National Association offering online lending products in all 50 U.S. states, Washington, D.C., and Puerto Rico. All loans are provided by KeyBank National Association, a nationally chartered bank. Member FDIC. For more information, visit www.laurelroad.com.
4 Important Disclosures for LendKey.
Refinancing via LendKey.com is only available for applicants with qualified private education loans from an eligible institution. Loans that were used for exam preparation classes, including, but not limited to, loans for LSAT, MCAT, GMAT, and GRE preparation, are not eligible for refinancing with a lender via LendKey.com. If you currently have any of these exam preparation loans, you should not include them in an application to refinance your student loans on this website. Applicants must be either U.S. citizens or Permanent Residents in an eligible state to qualify for a loan. Certain membership requirements (including the opening of a share account and any applicable association fees in connection with membership) may apply in the event that an applicant wishes to accept a loan offer from a credit union lender. Lenders participating on LendKey.com reserve the right to modify or discontinue the products, terms, and benefits offered on this website at any time without notice. LendKey Technologies, Inc. is not affiliated with, nor does it endorse, any educational institution.
5 Important Disclosures for CommonBond.
Offered terms are subject to change. Loans are offered by CommonBond Lending, LLC (NMLS # 1175900). If you are approved for a loan, the interest rate offered will depend on your credit profile, your application, the loan term selected and will be within the ranges of rates shown. All Annual Percentage Rates (APRs) displayed assume borrowers enroll in auto pay and account for the 0.25% reduction in interest rate. All variable rates are based on a 1-month LIBOR assumption of 2.37% effective July 10, 2019.
6 Important Disclosures for Citizens Bank.
Citizens Bank Disclosures
|2.27% – 6.89%1||Undergrad & Graduate|
|2.27% – 7.55%2||Undergrad & Graduate|
|2.43% – 6.65%3||Undergrad & Graduate|
|2.24% – 6.67%4||Undergrad & Graduate|
|2.37% – 7.95%5||Undergrad & Graduate|
|2.46% – 9.24%6||Undergrad & Graduate|